Daily Crude Oil Analsys

WTI Crude Analysis & Intraday Plan

Dec 22nd 2016 Updated at 10:09 pm EST on Dec 21st 2016  

In the trading report for Wed Dec 21st, I’d written “..strong resistance at 5375/80 held perfectly yesterday so this is the main challenge for bulls again today.”. Well, we topped exactly here and sold off to support at 5280/70, initially bottoming just above but then continued lower to 5232.

For the upside scenario for today, there is actually a lot of resistance from 5280 up to 5325 so gains are likely to be limited. If we continue higher however look for strong resistance again at 5375/80. Shorts need stops above 5400 with a break higher targeting 5415/20 & 5440/50. If we do continue higher this week I’d look for 5480/90.

For the downside picture today, WTI Crude holding below 5280/70 is more negative for today re-targeting 5235/30 before minor support at 5200/5190. However further losses target minor support at 5160/50.  Although highly unlikely, but if we fall as far as 5120/10 use this as an excellent buying opportunity with stops below 5075.

Pivots for Dec 22nd, 2016

R3=53.81 | R2=53.23| R1=52.87 <-> S1=52.15 | S2=51.80 | S3=51.21

WTI Crude daily chart

cl-daily-12-22-2016

News with early Asian trading in focus

Dec 22nd 2016 Updated at 10:09 pm EST on Dec 21st 2016 

Oil prices nudged higher in tepid Asian trading on Thursday, supported by a weaker dollar and optimism crude producers would abide by an agreement to curb output to prop up markets. But gains were capped by an unexpected rise in U.S. crude inventories last week and as Libya said it expected to boost output over the next few months.

U.S. West Texas Intermediate crude had risen 13 cents to $52.62 a barrel by 0121, after closing the previous session down 81 cents. Brent futures for February delivery climbed 17 cents to $54.63 a barrel, having previously finished 89 cents lower. The dollar index which tracks the greenback against a basket of six rival currencies, slipped as investors took profits after its rise to a 14-year peak of 103.65 earlier this week. A weaker dollar makes greenback-denominated commodities including oil cheaper for holders of other currencies. “We’re pretty close to the closing level – it’ll be interesting to see if the upward momentum is maintained as the Europe and U.S. sessions open up,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. Russian Energy Minister Alexander Novak on Wednesday said trust between oil producing countries is important if a global deal to curtail output is to succeed. “It is a safe assumption particularly in the early stages that OPEC and non-OPEC producers will abide by the agreement to curb output,” Spooner said. “If you look at where the biggest production cuts are coming from its largely about the Gulf states and Russia – this gives me even more comfort there will be material compliance,” he said. “Russia invested a lot in securing agreement so you wouldn’t expect them to fail to comply in the early stages. I think compliance is likely.”

Members of OPEC led by Saudi Arabia and non-OPEC members signed a deal earlier this month to cut oil output by almost 1.8 million barrels per day from Jan. 1. Meanwhile, Libya’s National Oil Corporation (NOC) said it hoped to add 270,000 barrels a day to national production after it confirmed on Tuesday that pipelines leading from Sharara and El Feel fields had reopened. Elsewhere, U.S. crude stocks posted a surprise build last week, climbing by 2.3 million barrels compared with an expected 2.5-million barrels drop, the U.S. Energy Information Administration said on Wednesday.

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